Solar Loans: Lenders Offering Solar Panel Financing
Solar panels can be a worthwhile investment since you can lower your electricity bills. However, the upfront cost can be quite expensive. Before taking out a solar loan, compare what you'll save versus what you'll pay to determine if solar panel financing is worth it.
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Installing solar panels on your home is a great way to reduce your power bill and use renewable energy. To cover the upfront costs, solar loans for homeowners is an option.
But before you take out a personal loan, you should compare it to other options. Personal loans may be a better deal for you, but they could also cost more in the long run, depending on your situation.
On this page:
Lenders That Offer Solar Loans
Personal loans can be used for almost anything—including home improvement projects such as installing solar panels.
A personal loan is usually preferable to using a credit card to make large purchases because personal loan interest rates are likely to be lower, and some credit cards will not offer credit limits high enough to accommodate the purchase of a solar panel system.
Here are some lenders that offer solar panel loans.
LightStream
Rates (APR)
4.99% – 16.99%*
with AutoPay
Loan Amounts
$5,000 – $100,000
Credit Score
660+
LightStream offers solar loans with low rates and no fees to consumers with good credit. Borrowers can receive their funds as soon as the same day and there are no prepayment penalties for paying off the loan early.
- Credit score category: Excellent, good
- Soft credit pull to check rates: Not available
- Deposit time: As soon as the same day
- Origination fee: 0%
- Late fee: None
- Discounts: 0.50% interest rate reduction for enrolling in autopay
- Repayment terms: 24 – 144 months**
Upgrade
Rates (APR)
7.99% – 35.97%
Loan Amounts
$1,000 – $35,000
Credit Score
620+
Upgrade is an online lending platform that utilizes technology to help borrowers efficiently access loan products. They are a great option for borrowers with bad or fair credit, as well as those that need smaller loans.
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As soon as the next day
- Origination fee: 2.9% – 8%
- Late fee: $10
- Repayment terms: 36 or 60 months
Upstart
Rates (APR)
8.41% – 35.99%1
Loan Amounts
$1,000 – $50,0002
Credit Score
600+
Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and many other variables when determining eligibility.3 This model leads to 27% more approvals and 16% lower rates than traditional models.4
- Credit score category: Fair, bad
- Soft credit pull to check rates: Yes
- Deposit time: As fast as one business day
- Origination fee: 0% – 8%
- Late fee: $15 or 5% of payment
- Repayment terms: 36 or 60 months
If you’d like to compare other options, you can check out our guides to the best home improvement loans and best personal loans.
Other Methods of Solar Panel Financing
There are other ways to finance your solar project if you aren’t sold on the idea of an unsecured personal loan.
Home Equity Line of Credit (HELOC)
A HELOC uses your home to secure a line of credit. You can borrow what you need, repay it, and then borrow again later. It’s a great way to finance your home improvement project and get the solar power you need.
If you want to learn more about home equity lines of credit and options available to you, check out our guide to the best HELOCs.
Home Equity Loan
Home equity loans use the value of your home as collateral. You can generally borrow 100 percent of your equity up to 80 percent of the appraised value of your home. The funds are disbursed in one lump sum, and then repayment begins like a regular installment loan.
If you want to learn more about home equity loans and options available to you, check out our guide to the best home equity loans.
Cash
The old standby method of paying for anything, including a new solar system, is saving the cash to do it. You can keep the money in an interest-bearing account while you save and add to it each month or each paycheck.
Using the cash method means you will not have loan payments. Once you buy your system, it’s yours free and clear, with no additional fees or interest to pay. This will take a lot of saving, but it may be worthwhile if you’re able to quickly improve your energy efficiency.
Leasing
Some manufacturers of solar equipment will offer a solar lease for a fixed rate per month. One of the biggest benefits to solar leasing is that the manufacturer will do the solar installation and maintenance it for you. You can pay a fixed rate for solar energy, and you keep any additional generated energy for free.
You can also prepay up to 20 years of energy, which means no more electric bills at all for two decades. Before choosing this option, make sure you understand the true savings and costs. Leasing doesn’t always save everyone money in the long run, and you don’t own the panels when your lease ends.
How Much Do Solar Panels Cost?
Solar panels can be expensive. As of January 2019, the average solar panel cost was $3.14 per watt, and the average panel system size needed for a moderate-sized home was six kilowatts or 6,000 watts.
That means you can expect to spend about $13,188 on your system after accounting for tax credits. Solar panels are cheaper than they were a year or two ago, but that’s still a lot of money. You can lower that cost by being more frugal with your electricity needs, but you’ll still need to spend about $10,000.
The good news about solar panel systems is that you’d no longer have an electric bill, and in some cases can even sell power back to the utility company, resulting in a profit for you that may pay for the maintenance on your system.
The downside, however, is that depending on your location, terrain, and how often you have sunshine, a solar system may not generate enough power for your needs. You’ll need to understand exactly how much power you’re using and how much of a solar system you’ll need to match that. Then you’ll need to decide how you’ll fund what you need.
Homeowners Should Weigh All Solar Panel Financing Options
Remember, there are many options available to you if you’re looking to go solar, including leasing or taking out a personal loan or secured loan. Unlike many other investments, with a solar panel system, you should expect to see immediate returns on your investment by saving money on your monthly electricity bill.
And with so many options available, it’s a good idea to shop around for the best rates and loan terms. Compare the best home improvement loans available to you, including banks, credit unions, and solar retailers.
*Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice.
**Payment example: Monthly payments for a $10,000 loan at 5.95% APR with a term of three years would result in 36 monthly payments of $303.99.
1The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.
2Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.
3Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.
4Approval numbers compare the 2020 loan approval rate by the Upstart model and a hypothetical traditional credit decision model. The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical traditional model used in Upstart’s analyses was developed in connection with the CFPB No Action Letter access-to-credit testing program, is trained on Upstart platform data, uses logistic regression and considers traditional application and credit file variables.
